Restaurants Show Strength As Leaders Consolidate

The restaurant group has slid out of the top 20 since we last checked in during late July.

In that time, Darden Restaurants (DRI) and Panera Bread (PNRA) have continued to pull back sharply.

McDonald's (MCD) has been in a downtrend since April. Yum Brands (YUM) continues its wobbling consolidation below a high set April 2012. There is also clear strength in the group. Krispy Kreme Doughnuts (KKD) and low-priced Wendy's (WEN) are extended and near highs. So is Buffalo Wild Wings (BWLD).

As a result, the group ranked No. 33 Friday, still a comparatively strong ranking.

Starbucks has rallied since clearing a long-term cup-with-handle base March 7. It drifted down in light trade from an August high for its fourth test of 10-week support since its breakout. If the pullback becomes a base, it would be a third-stage pattern.

Chipotle notched its high Aug. 1. The stock cleared a very large, first-stage cup-with-handle base in the first week of July. It has tested its 10-week line once since the breakout. It may extend the pullback into a second-stage base.

Domino's Pizza (DPZ) is testing support for the umpteenth time since its late-September breakout. It appears to have found support and, if the pullback becomes a base, it would be a second-stage structure.

One stock worth monitoring might be Noodles & Co. (NDLS) It is consolidating below a July high, but is still 129% above its June IPO price. Its fundamentals are generally strong. The prevailing concern is its very high debt-to-capital ratio.

See Also

As Starbucks (NASDAQ:SBUX) continues to expand its grip beyond coffee and espresso drinks, the coffee-shop giant's Evolution Fresh brand is partnering with yogurt maker Dannon to bring smoothies and parfaits to its menus, plus a ready-to-eat item to grocery store shelves. The smoothies, made with ...

Keurig Green Mountain (NASDAQ:GMCR) inked a distribution deal with New Orleans-based Reily Foods, the latest in a series for the maker of K-Cup single-serve coffee pods and brewing machines. Under terms of the deal with family-owned Reily, Keurig gains rights to make and distribute New England ...

With an excellent IBD Composite Rating of 97 and a share price that has risen by about two-thirds over the past six months, Red Robin Gourmet Burgers (NASDAQ:RRGB) is already one of the restaurant sector's top stocks. But the future might hold even more promise for the operator of more than 500 ...

Restaurants remain a popular item on Wall Street's menu as more than a handful scored new highs Tuesday. Papa Murphy's (NASDAQ:FRSH) rose 0.80 to 18.35 in volume about 10 times greater than average. The May initial public offering's daily average volume is less than 200,000. However, the roughly ...

Sonic boosted its full-year earnings guidance Tuesday after reporting fiscal second-quarter profits that doubled from a year earlier and topped estimates. The drive-in chain expects to grow its per-share earnings by 25%-27% in fiscal 2015, up from a prior forecast of growth at the high end or ...

03/24/2015 06:15 PM ET

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